24/11/2025
DID YOU KNOW THESE ACCOUNTS ARE IMPORTANT FOR TRACKING AS BUSINESS OWNER?
Cash: The account where all business transactions pass. This is an important account that often bookkeepers use two journals, cash receipts and cash disbursements, to track the activity.
• Accounts Receivable: If your business sells products or services and you don’t collect money immediately, then you have receivables. This account tracks the money due from customers. This needs to be kept up-to-date so you can send accurately and timely invoices.
• Inventory: The account where you account for all of the products you have in stock. The numbers you have in your books should be tested by doing physical counts of inventory on hand.
• Accounts Payable: The account that allows you to see what money is leaving or has left the business - and when. This account gives you a clear view of everything you need to pay and makes sure that you don’t pay anyone twice.
• Loans Payable: The account which tracks and breaks down everything that you still owe and when payments are due for anything that you’ve borrowed.
• Sales: The account where you track all of your incoming revenue from sales transactions. This is another important account, as recording sales accurately and in a timely manner helps to know where your business stands.
• Purchases: The account where you track any materials or goods that you have bought for your business. This is a key component of calculating Costs of Goods Sold which you subtract from Sales to find your business’ gross profit.
• Payroll Expenses: The account where you track salaries and wages paid to your employees. This is often the biggest cost of all for many businesses. Keeping this accurate is essential for meeting tax and other reporting requirements.
• Retained Earnings: This account tracks any of your company’s profits that are reinvested in the business and aren’t paid out to the owners. The earnings here are cumulative, so they appear as a running total of money that’s been retained since the company started. It’s a good way of tracking how well your business has done over time.
NOW YOU KNOW.
copied from book keepers institute
